Naval’s Periscope Session – 6/6/18

Intro

Each tweet is written, so it can stand alone – this was deliberate, it makes the entire tweet storm randomly accessible

This Periscope will be discussing that

“Everyone pretends like they don’t want to make money, but in reality, everyone does want to make money”

Money buys you freedom in the material world

It won’t make you happy, but it will solve a lot of your external problems

There are many people who are attached to not being happy/making money, so sometimes it’s difficult to talk about these topics

These people don’t want to feel bad about their choices, so they tend to shut down these conversations

“Everyone in the world can be happy, and everyone in the word can be wealthy”

It’s just a matter of education, know-how, and effort

Ownership vs. Wage Work

If you’re getting paid for renting out your time, you can make good money, but you won’t make the kind of money that can really give you freedom – the passive income that can make you money while you’re on vacation

You want to own equity – “If you don’t own equity in a business, your odds of making money are slim” – Ownership is important

Productize Yourself

If you can only remember two words from the tweet storm – PRODUCTIZE YOURSELF

How you package yourself in a product

“Create a product out of whatever it is that you naturally and uniquely do really well”

If you compete at being someone else, you won’t be the best in the world at it, and in turn you won’t get rewarded properly for it

Compound Interest

Compound interest – keeps adding on itself, so that you end up with thousands of times your original investment

Compound business relationships – people trust you when you have shown yourself in a visible, and accountable way, to be a high integrity person

This can apply to your reputation, as it’s compounded over time

If you’ve worked with the same person for a long enough time, the good relationship is compounded to a place where trust tends to dominate

“In the intellectual domain, compound interest rules”

“When you find the right thing to do, and people to work with, invest deeply into that, and stick with it for decades” – THAT’S how you make the big bucks

How do you escape the 9-5?

It’s difficult

You get sucked into being busy, and the job chews into all your time – it makes it hard to work on anything else

Find a career/job/education where you will end up in a business where the inputs and outputs are disconnected

2000 years ago, the inputs and outputs were connected – effort=result

Nowadays – we have knowledge worker jobs

A good developer can write a good piece of code that will generate millions of dollars over the next few years

“Navigate towards a career where you’re tracked on the output”

Sales is a good example, or product building etc.

NOT a customer service role

Can 7 billion people all productize themselves?

Yes

Assume everyone had maximum education and practical knowledge

Naval thinks if this were the case, within 5 years everyone would be independently wealthy, robots would be doing the manual work, and we’d all be doing creative work

Liking – if someone likes you, they’re more likely to be persuaded by you, so be nice to people

Authority – you’re more likely to listen to a doctor for medical advice than a non-doctor

Scarcity – we want what’s scarce

Social Proof – monkey see, monkey do

Reciprocity – people always want to repay you

“Persuasion is one of foundational skills that everyone should learn”

Additional Foundational Skills People Should Have in Addition to Persuasion

Basic mathematics – probability and statistics are important for personal finance

Basic accounting

Calculus – understand rates of change, be able to measure the change in small discrete/continuous events

Specific Knowledge

Specific Knowledge – A combination of unique traits from your DNA, combined with your unique upbringing and your response to it

Figure out what it was you were doing as a kid, almost effortlessly, that you didn’t even really consider a skill, but people around you would notice

Programming

Is not a commodity skill

In the future, computers will not write code – coding is a general AI task

It is not likely to be automated in our lifetimes

The top coders in the world can make billions of dollars of value, while a not so good coder can well, create no value

The spread is so large

What would Naval major in today if he were to go to college?

Learn things in college that you can’t learn by yourself

Mathematics, programing, physics, medicine etc.

If you can learn STEM disciplines on your own, you may not need to go to school

One of the advantages of a college education is an alumni network

Desires

We all have many desires in life

When you’re desires are split up, you create anxiety, and this forces you to lose focus

Pick the one thing you care about more than anything, and ignore everything else

“If you’re going to make money, it has to be your number one desire”

“It’s very, very hard to be successful in business while trying to live a well rounded life”

Decision Making

Naval’s 3 decision making heuristics

When faced with a difficult choice, if you can’t decide, the answer is no

Modern society is filled with options – “We are biologically built to not realize how many choices there are, because we evolved in tribes of ~150 people, where if you pass up one choice, the second one never comes along”

When you choose something, you often get locked in for a long time

Only say yes when you’re pretty certain

If you have to create a pro/con list – the answers no

If you have 2 choices to make, and they’re relatively equal (it’s 50/50), take the path that’s more difficult and more painful in the short term

Short term pain, means long term gain

Our brain tends to overvalue the choice with short term happiness, and is trying to avoid the one with short term pain

Lean into the pain

“Most of the gains in life come from suffering in the short term, so you can get paid in the long term”

“Hard choices, easy life. Easy choices, hard life.”

In times of interpersonal conflict, make the choice that will leave you more equanimous (internally calm)

Peace of mind is a precursor to happiness

Happiness is one of those things that can’t be chased directly – if you do chase it, you’re chasing pleasure

Pleasure is just a high, which you eventually come crashing down from

“If you actually want to be happy and content, that comes from peace”

Be Impatient and Willful

Naval hates wasting time – he’ll often leave a dinner/party at a moments notice if he feels it’s a waste of time

“The moment I figure out something is a waste of my time, I leave immediately”

After looking back now, Naval realizes most of his past business trips were a waste of time

“Business trips are almost never worth it”

“Value your time, it’s all you have”

Failiure

“If you didn’t have failure, you’d never improve”

Failure causes us to change, and through that, we get growth

If you always got what you wanted, you’d probably be married to your high school sweetheart and be a manager at your first job

99% of All Effort is Wasted

Most of what you’ve learned in school, doesn’t really apply to your life now – sure you learned from it, but according to goal oriented life, only about 1% of the effort you put in pays off

In most aspects of life, try to find the thing you can go all in on with compound interest

In dating – the minute you think the relationship won’t lead to marriage, you should probably end it